U.K. to Review Libor Future, Lawmakers Summon Barclays CEO

June 30 (Bloomberg) -- The U.K. government will begin a
review into the future of the London interbank offered rate
after Barclays Plc was fined $451 million three days ago for
submitting false rates to benefit derivatives trades.

The inquiry, which begins next week, will focus on possible
criminal sanctions against people who breach future regulations
on the rate, a Treasury spokesman, who declined to be named
because of government policy, said today. Separately, Barclays
Chief Executive Officer Bob Diamond and Chairman Marcus Agius
have been called to appear before lawmakers on the Treasury
Select Committee.

Barclays, the U.K.’s second-largest lender, was fined the
record sum and its top executives agreed to forgo bonuses after
investigators found traders and senior managers “systematically”
tried to rig the Libor and Euribor, its equivalent in euros.

Opposition Labour Party leader Ed Miliband today called for
a “full, open and independent inquiry which the public can
trust” into the customs and practices of the banking industry.

Diamond has been asked to appear before the Treasury Select
Committee on July 4 to face questions “about the penalties
levied against Barclays by authorities in the U.K. and the U.S.
following an investigation into the submission of various
interbank offered rates,” the committee said in a statement
today.

Barclays non-executives, including Agius, have been asked
to appear on July 5, it said.

‘Systematically Rigged’

“The Libor interest rate benchmark -- crucial to
transactions right across the economy and affecting millions of
people -- was systematically rigged over a period of years,”
select committee Chairman Andrew Tyrie said in the statement.
“It appears that many banks were involved and Barclays were the
first to own up.”

Tyrie said the practice was a “damaging scam” that had
“severely tarnished” the reputation of Britain’s financial
services industry.

“The public’s trust in banks has been even further
eroded,” he said. “Restoring the reputational damage must
begin immediately. Parliament and the public need to know what
went wrong and whether the perpetrators have been rooted out. We
also need to be given confidence that this has been put right.”

The British public “wants a moment of reckoning” for
banks, Miliband said in a televised speech today.

“They want a light shone into every dark corner of our
banking system,” Miliband told a conference in London. “They
want bankers held to account. They want the system rebuilt.
Nothing less than a full public inquiry can do that. Sticking-plaster solutions will not heal this wound.’